A government effort to combat healthcare fraud recovered a record $4.2 billion in taxpayer funds during fiscal year 2012.
This is the highest three-year average return on investment in the 16-year history of the Health Care Fraud and Abuse Control program.
Run by the by the Justice Department and the Department of Health and Human Services, the program recovered $14.9 billion over the past four years, an increase from $6.7 billion over the previous four-year period.
The program targets individuals and companies who attempted to defraud federal health programs serving seniors and taxpayers or who sought payments to which they were not entitled. Since 1997, the HCFAC Program has returned more than $23 billion to the Medicare Trust Funds.
The success of this joint Department of Justice and HHS effort was made possible by the Health Care Fraud Prevention and Enforcement Action Team, created in 2009 to prevent fraud, waste and abuse in the Medicare and Medicaid programs and to crack down on individuals and entities that are abusing the system and costing American taxpayers billions of dollars.
“This was a record-breaking year for the Departments of Justice and Health and Human Services in our collaborative effort to crack down on health care fraud and protect valuable taxpayer dollars,” Attorney General Eric Holder said in a statement. “In the past fiscal year, our relentless pursuit of health care fraud resulted in the disruption of an array of sophisticated fraud schemes and the recovery of more taxpayer dollars than ever before.”
About $4.2 billion stolen or otherwise improperly obtained from federal health care programs was recovered and returned to the Medicare Trust Funds, the Treasury and others in 2012.
“Our historic effort to take on the criminals who steal from Medicare and Medicaid is paying off: We are gaining the upper hand in our fight against health care fraud,” HHS Secretary Kathleen Sebelius said in a statement. “This fight against fraud strengthens the integrity of our health care programs and helps us fulfill our commitment to our seniors.”
The effort is also using tools authorized by the Affordable Care Act to fight fraud, including enhanced screenings and enrollment requirements, increased data sharing across the government, expanded recovery efforts for overpayments and greater oversight of private insurance abuses.
Since 2009, the Justice Department and HHS have improved their coordination through HEAT and increased the number of Medicare Fraud Strike Force teams to nine. The Justice Department’s enforcement of the civil False Claims Act and the Federal Food, Drug and Cosmetic Act have produced similar results.
These combined efforts coordinated under HEAT have expanded local partnerships and helped educate Medicare beneficiaries about how to protect themselves against fraud. In 2012, the two departments continued their series of regional fraud prevention summits, and the Justice Department hosted a training conference for federal prosecutors, FBI agents, HHS Office of Inspector General agents and others.
The strike force teams use advanced data analysis techniques to identify high-billing levels in health care fraud hot spots so that interagency teams can target emerging or migrating schemes as well as with chronic fraud by criminals masquerading as health care providers or suppliers.
In July Holder and Sebelius announced the launch of a ground-breaking partnership among the federal government, state officials, leading private health insurance organizations and other health care anti-fraud groups to share information and best practices to improve detection of and prevent payments to scams that cut across public and private payers.
In 2012, the Justice Department opened 1,131 new criminal health care fraud investigations involving 2,148 potential defendants and a total of 826 defendants were convicted of health care fraud-related crimes during the year. The department also opened 885 new civil investigations.
The strike force coordinated a takedown in May 2012 that involved the highest number of false Medicare billings in the history of the strike force program. The takedown involved 107 individuals, including doctors and nurses, in seven cities, who were charged for their alleged participation in Medicare fraud schemes, involving about $452 million in false billings.
The HHS also suspended or took other administrative action against 52 providers using authority under the health care law to suspend payments until an investigation is complete.
Strike force operations in the nine cities where teams are based resulted in 117 indictments, informations and complaints involving charges against 278 defendants who allegedly billed Medicare more than $1.5 billion in fraudulent schemes. In 2012, 251 guilty pleas and 13 jury trials were litigated, with guilty verdicts against 29 defendants, in strike force cases. The average prison sentence in these cases was more than 48 months.
In 2012, CMS began the process of screening all 1.5 million Medicare-enrolled providers through the new Automated Provider Screening system that quickly identifies ineligible and potentially fraudulent providers and suppliers prior to enrollment or revalidation to verify the data. As a result, nearly 150,000 ineligible providers have already been eliminated from Medicare’s billing system.
CMS also established the Command Center to improve health care-related fraud detection and investigation, drive innovation and help reduce fraud and improper payments in Medicare and Medicaid.
From May 2011 through the end of 2012, more than 400,000 providers were subject to the new screening requirements and nearly 150,000 lost the ability to bill the Medicare program due to the Affordable Care Act requirements and other proactive initiatives.
The Department of Justice and HHS also focused on civil health care fraud enforcement during 2012. The Justice Department’s Civil Division Fraud Section, with their colleagues in U.S. Attorneys’ offices throughout the country, obtained settlements and judgments of more than $3 billion in FY 2012 under the False Claims Act.
These matters included unlawful pricing by pharmaceutical manufacturers, illegal marketing of medical devices and pharmaceutical products for uses not approved by the Food and Drug Administration, Medicare fraud by hospitals and other institutional providers, and violations of laws against self-referrals and kickbacks.
This marked the third year in a row that more than $2 billion has been recovered in FCA health care matters. Additionally, the Civil Division’s Consumer Protection Branch, working with U.S. Attorneys’ offices, obtained nearly $1.5 billion in fines and forfeitures, and obtained 14 convictions in matters pursued under the Federal Food, Drug and Cosmetic Act.
